Perhaps most importantly – with the advent of machine learning – machines perpetually remain on the learning curve. The old axiom “you can’t teach an old dog new tricks” does not apply to machines.

Many tasks lend themselves well to “machine-led” environments (by “machine-led” we refer to discrete tasks and complex workflows that have or could have machine learning and/or artificial intelligence as a core underpinning). For these tasks, humans will add value by providing machines with access to data sets that machines could not acquire on their own. The saying “feed the beast” will have never been truer.

However, there are instances where machine-led processes are not optimal. For example: great works of art, music and other forms of inspired creativity and original thinking where the outcome isn’t clear.

We are inspired to create when we are inspired to create. Would a sentient machine be inspired to create the Mona Lisa? Would a sentient machine be inspired to put people on Mars as Elon Musk wishes to do? (more likely that a machine would only pursue colonization of Mars when it would be practical to pursue that outcome as a result of an event or series of events here on earth). Would a sentient machine have been motivated to create electric vehicles?

Count me an optimist in that I believe that the most strategic, creative endeavors will always benefit greatly from human participation and leadership.

Grist for the Mill

It’s only a matter of time before Technology giants begin to reach into public schools in an effort to identify and recruit top-tier talent in an Intellectual Capital-driven global economy.

Technology’s Four Horsemen – Alphabet, Apple, Amazon and Facebook – hired 247,714 net new employees in 2017, up 89% from the previous year’s figure of 131,196. Amazon alone accounted for 91% of 2017’s total and 84% of 2016’s total (this makes sense given the nature of Amazon’s retail-centric, distribution-heavy business model).

Technology companies require an enormous amount of human capital and brainpower. This is especially true of large technology companies that work to define new market opportunities and use cases. Waiting for the U.S. K-12 public education and university systems to produce inadequately trained professionals is both a suboptimal outcome and supply chain bottleneck. Therefore, we expect for companies such as the Four Horsemen to become increasingly aggressive and systematic in their approach to training and recruiting young people.

We have experienced early green shoots of this phenomenon with Peter Thiel’s“Thiel Fellowship”a foundation that awards $100,000 grants to high potential young people. Those accepted (104 fellows and alumni, 2,800 application last year), to the two-year program learn how to write code and build companies. Young people skip or step out of college to become Thiel Fellows where in addition to grant proceeds, Fellows receive support from the foundation’s network of entrepreneurs, investors and operators.

Another example comes from my personal experience in China 2006-2011 where a number of the large China-based IT Services companies set up company-owned “universities” to train recent college graduates in an effort to better prepare them for the type of work that they would perform on behalf of clients. My view is that these companies will reach further back into the student supply chain and begin to recruit and train students during their junior high and high school years.

Reduce Time-to-Productivity

A misconception that many have is that an engineer fresh out of college can hit the ground running at optimal efficiency and drive massive value for companies. That’s hardly the case. Universities do a poor job of preparing students for life in the real world. It makes enormous sense for companies to actively invest in the U.S educational system both at the K-12 and university levels. Short-term operating profit margin dilution will pay dividends over the long-term in the form of new differentiated products and services. To ensure a worthwhile outcome it is paramount that companies take a systematic approach to execution. If nothing else Alphabet, Amazon, Apple and Facebook excel in measuring outcomes and re-calibrating where necessary.

No Teachers Required

Given what we have posited it would make sense for the Four Horsemen and others to get involved in public education early in students’ academic careers. Further, it would be logical for companies to seek to influence the academic experience as much as is necessary to maximize the probability of optimal outcomes for both students and companies. Therefore, it is not unreasonable to expect that the Four Horsemen and a few select others will eventually shape student curriculum — particularly in Math and Science. This may range from content creation to teaching methodologies to the act of teaching itself. Teachers’ Unions ought to be concerned. From a technology standpoint it would not be difficult to replace public school teachers nor college professors with machine learning platforms wrapped in friendly AI skins.AmazonGo is already doing this with retail checkout lines. It’s less a question of “how?” and more a question of public will.

Yes if You Ask Us While AT&T moving to acquire Time Warner and Disney (and Comcast?) moving to acquire Fox are interesting deals, it’s more interesting to us what the next chess move may be in a world that increasingly values content (live sports and premium original content in particular). We recently wrote about and…

It’s fun to speculate. What if Google parent company Alphabet were to acquire Walmart in an effort to better compete with Amazon? One of the advantages that Amazon has in an AI-driven world is a fully integrated retail experience. Amazon customers may speak buy orders into their Alexa-powered smart device – “re-order paper towels” -…

I have previously been critical of Apple’s AI effort. Siri lags both Google and Amazon (Alexa) in terms of speed and accuracy. Apple’s Shazam acquisition is good for consumers in that it bundles a service people enjoy with Apple Music. More importantly, the acquisition will drive more Siri queries – something Siri needs to get itself into fighting shape to better compete with Google and Amazon. Learn more by listening to our recent CEORater Podcast: Apple’s Acquisition of Shazam Will Benefit Siri

Cinemark’s new subscription service – Movieclub – is a good start, however bolder steps are required. Theater owner/ operators must take a bold, creative approach toward mitigating the risk associated with the global mega-trend that is in-home viewing. Listen to our recent CEORater Podcast on the subject:

Movieclub subscription service details:
– $8.99 per month;
– One 2D movie per month per subscriber;
– Unused tickets roll over and never expire;
– Members may share unused allocations with other members and non-members;
– No online fees;
– Additional tickets may be purchased at member price of $8.99;
– 20% discount on concessions

Our advice to theater owners: make the necessary capital investment and partner with movie studios and technology companies to offer premium services such as Augmented Reality (“AR”) and Virtual Reality (“VR”) in-theater experiences.
– Average ticket price for a Friday/Saturday night 2D movie = $11. Therefore Movieclub subscription is approximately an 18% discount per ticket (before the 20% concession discount);
– A Net Positive for Cinemark in that this offering will increase Cinemark’s revenue visibility, albeit at discounted prices.

Amazon’s straight-through-processing (“STP”) retail experience provides the company with an edge vs. Google in the AI war:

Visual output from our Amazon Alexa query – “Buy Amazon Echo”:

Consumers may execute the purchase transaction with one or two instructions. This is true for millions of products sold via Amazon’s retail platform. Amazon provides consumers with a holistic retail experience seamlessly combining intelligent, AI-driven product search with order processing and payment processing capability. We believe this integrated retail experience provides Amazon with an edge over Google in product search as well as with AI-powered personal assistants.

Here’s the comparable retail experience using Google’s AI:

The consumer is required to execute multiple additional instructions in order to execute the transaction using Google’s AI as a result of Google not having an integrated retail platform.

AT&T Ought to Be Allowed to Acquire Time Warner “As Is” AT&T (T) ought to be allowed to acquire Time Warner (TWX) “as is” (earlier today AT&T extended the deal close deadline to April 22 2018). It is puzzling why the Justice Department would push back on the deal. We recently covered the topic in…